Liz Weston: Some taxpayers face a desperate wait for refunds

As a 58-year-old woman on disability, Robin Short of Wallingford, Connecticut, relies on her tax refund to catch up on bills. She filed her return electronically in February, opting for direct deposit so she could get her $773 refund quickly.

She’s still waiting, as are millions of others. The IRS is slowly resuming operations after pandemic-related lockdowns, but delayed refunds are devastating some people’s finances.

TAX REFUNDS HAVE BECOME A LIFELINE

Tax refunds, which last year averaged $2,979, are the largest single infusion of cash for about 30% of U.S. families, says Fiona Greig, consumer research director at the JPMorgan Chase Institute, which researches economic issues. While many Americans use refunds to save or to pay down debt, significant numbers rely on the money to cover bills or to get needed medical care — and that was true even before COVID-19 threw millions out of work.

Delayed refunds can lead to evictions, hunger, creditor lawsuits and health problems from postponed medical care, among other ill effects. Many households live so close to the edge that they can experience hardship when a refund is delayed by two or three weeks, let alone several months, says John Thompson, chief program officer for the Financial Health Network, which researches financial challenges facing low- and moderate-income households.

“Not everybody has got the kind of flexibility or resilience to just be able to hold on,” Thompson says.

MOST IRS OPERATIONS SHUTTERED BY THE PANDEMIC

The IRS started shutting down tax return processing centers in March, along with its taxpayer help line, local offices and volunteer assistance programs. Soon after, it focused on sending out more than 159 million payments as authorized by the coronavirus relief package. By mid-May, the...